Minggu 2:

Port Structure

IEA3052 - PENGANTAR MANAJEMEN

PELABUHAN

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Bahan Kajian/Pokok Bahasan:
• Port Management and Operations
• The History of Ports
• Port Ownership, Structure, and Organization
• Port Workforce

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“To know a nation’s geography is to know its foreign policy.”
- Napoleon Bonaparte

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Port
Management
and Operations

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Port services
• Port services may encompass one or more of the four key business
categories of global trade and transport:
1. Landlords, through property ownership, leasing and management.
2. Brokers, by hosting or liaising with bunker brokers commodity brokers, property
brokers, ships’ agents, ship brokers, stock brokers, and so on.
3. Suppliers, through leasing and handling cargo equipment, and liaising with ship
chandlers, and suppliers of spare parts, engines, commodities, tools, and so on.
4. Manufacturers, by hosting or liaising with shipyards, petroleum refineries, and
industrial zones. Manufacturing also encompasses broad maritime activities
including port design, engineering technology, installation and modification of
equipment, manufacturing machinery, and so on.

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Port authorities
• Port authorities are in charge of harboring and securing ships, while
ensuring smooth operations throughout ships’ anchorage, pilotage,
berthing/unberthing, lightering, mooring/unmooring,
loading/unloading operations, and so on.

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Port Management and Operations
• Port Management may be defined as the process of organizing,
monitoring, and controlling the activities of a seaport in a precarious
global industry, in order to accomplish corporate goals, which are in
line with its regional and national interests.

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Port management within a global supply chain. (Courtesy of M.G. Burns.)

illustrates how port management within a typical supply chain is a nexus of sea trade, multimodal trade, and
inland trade.
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Ports’ Strategy in the Throes of a Transition
1. Information Technology is an umbrella term that covers the satellite
systems and software used to facilitate global communication
between ports, ships, and supply chain.
2. Maritime Technology encompasses the novelties of ship design,
marine engineering, ship building, and ship operations.
3. Global Economy and Trade: The “New Economy” concept
introduced in the 1980s illustrated a transition from a
manufacturing-based economy to a service based economy.

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The “New Economy”

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The History of
Ports

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“Whosoever Commands the Sea, Commands Trade; Whosoever
Commands the Trade of the World, Commands the Riches of the World,
and Consequently the World Itself.”
- Sir Walter Raleigh (1552–1618)

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Ports’ History and Etymology: A Passage, a Journey, and a Haven
• The etymology of the word port derives from the ancient Greek poros
(πόρος), which means both “passage” and “journey,” which in turn
became the Latin word portus, and the modern international port.
• For thousands of years, seaports have been vibrant centers of
civilization involving trade and the exchange of currencies,
commodities, and cultures.

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A modern timeline of global port development encompasses four key eras and outlines a set of drivers:
• First, the era of national independence, whose grandeur signified the beginning of the industrial
revolution and faded in the 1960s.
• Second, the era of containerization from the 1960s until the 1980s, a time when global trade had
regained its pre-WWII level through manufacturing and trading of value-added goods.
• Third, the era of logistics, whose rapid expansion lasted from the 1980s to the 1990s. That era saw an
intensive production of high value-added goods, while more complex production and trade networks
and efficiency resulted in the most profitable ports operations.
• Fourth, globalization gained momentum in the 1980s and continued throughout the 1990s, by means
of trade and financial growth around the globe.
• Burn proposes a fifth era in the Post-New Economy era, signifying the aftermath of the 2008 global
economic meltdown.

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Advanced Thinking: National Ports, Diplomacy, and Economy
• While examining history, the role of shipping in a country’s diplomatic
and economic strategy can hardly be exaggerated.

“If we mean to be a commercial people, or even to be secure on our

side of the Atlantic, we must endeavor as soon as possible to have a
Navy.”
- George Washington

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Ports History, Planning, and Development
• The Port of Houston, Texas
• The Port of Shanghai
• The Port of Piraeus, Greece
• The Port of Istanbul (Constantinople), Turkey, and the Bosphorus Canal
• The Port of Haifa, Israel
• The Port of Singapore
• The Port of Hamburg

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Port Ownership,
Structure, and
Organization

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Forms of Port Ownership, Structure, and Organization
The United Nations Conference on Trade and Development (UNCTAD) Handbook for Port Planners in Developing Countries
(1998) specifies the governmental powers of a nationwide port authority in the following manner, provided that the
operating decision making will be undertaken regionally:
• Monetary policy: Authorization to establish common economic objectives for ports, such as investment policies and goals
(as defined on a standard basis), with a common policy to local—as opposed to centralized—facilities funding, and
informing the government authorities on loan requests
• Tariff policy: Capacity to regulate tariffs and charges as needed to safeguard the general public interest
• Investment policy: Ability to accept plans and projects for port investment opportunities in amounts exceeding a specific
figure, under the condition that the suggested plans were largely in line with another national plan, sustained by the
authority
• Labor policy: Authority to establish common hiring standards, a standard salary structure, standard qualifying criteria for
professional advancement, and the ability to authorize standard labor union processes
• Legal policy: Capacity to represent the local port authorities as legal advisor
• Licensing policy: If applicable, authority to set up principles for accreditation of port workforce, brokers, or agents
• Research and data analysis policy: Authority to gather, evaluate, and distribute statistical data on port activity for common
use, and to finance scientific, industrial research into port matters as needed
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Port Governance
Port governance may be defined as the method by which power is exercised in the
management of a nation’s socioeconomic assets for growth (World Bank 1991). The key
categories of port governance are as follows:
1. Government/state ownership and administration.
2. Semi governmental organization: Autonomous ports/public trusts. A nonprofit
administration manages a port entity and its specified services.
3. State/regional ownership: The region’s full engagement in meeting the port’s
requirements owing to the port’s role in the regional economic growth.
4. Privately owned ports. Privatization triggers efficient allocation of port assets,
resulting in increasing its capital equity and revitalizing the regional economic climate.

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Port systems are also distinguished in terms of the following characteristics:
• Geographical orientation, that is, global, national, or regional
• Regulatory and policy system (globalization, liberalization, and protectionism)
• Service arrangement, that is, private, public, or mixed
• Infrastructure ownership, that is, land, technical structures
• Superstructure and equipment ownership, that is, warehousing, cargo handling
equipment, ship-to-shore handling equipment, outdoor sheds, and so on
• Management of stevedores (longshoremen); trade union members or nonunion
arrangements

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Port Ownership and Structural Types
• Public Service Ports: Service ports possess a public character.
• Tool Ports: Within a tool port model, the port authority is the owner, developer, and
handler of the port’s infrastructure and superstructure, whereas it leases the port’s
superstructure, including cargo handling equipment, to cargo handling companies.
• Landlord Ports: Landlord port models combine a public–private alignment: the port
authority serves as a legislative and administrative structure, whereas the private
sector provides its own superstructure (i.e., cargo handling equipment, cranes,
derricks, etc.) and other port operations.
• Fully Privatized Ports or Private Service Ports: Under the full port privatization
model, the port’s ownership and public policy-making is fully transferred from the
state to the private entity.

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Port Privatization
1. Full privatization pertains to the full port ownership passing onto a private entity that eventually
becomes the owner of all the land, water, infrastructure, superstructure, and generally all
properties and assets within a port’s domain.
2. Partial privatization pertains to an arrangement where only a fragment of the property, assets, or
operations is purchased by the private sector, for example, the superstructure is sold to the private
sector, or the permit issued by a public port authority to a private business to develop and control
a terminal, berth, or a designated port service. These contractual categories include the following:
• Concession agreement: Long-term facility lease, typically for 20–40 years.
• Service or leasehold contracts: A private operator performs specific operational tasks, whereas the port authority
retains ownership of the facility and equipment.
• Build–Operate–Transfer (BOT), Build–Own–Operate (BOO), and Build–Own–Operate and Transfer (BOOT)
arrangements. These agreements stipulate that as a prerequisite for operating a port segment, the private sector
must participate in financing, building, and managing of port facilities. Upon expiration of the agreement, the
ownership is shifted back to the public sector.

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Port Workforce

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PORT WORKFORCE: PRODUCTIVITY, GROWTH, AND EMPOWERMENT
STRATEGIES
To reestablish our sense of maritime economic growth, labor, and their effect on productivity, we
need to disassociate them with the global impact and the national product and observe their
correlation within an industrial framework; ports to be precise. Productivity is an essential
component of cost efficiency; it serves as an efficiency quantifier of a worker, software and piece of
equipment, a process, an entire port, or even the supply chain as a whole.

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Measuring Productivity, Throughput, and Growth
There are three major port productivity indicators:
• Cycle time or physical factors, where service is measured in cycle time, such as a ship’s turnaround
time, which includes waiting time owing to port traffic plus cargo loading time, and so on.
• Factor productivity indicators, which comprise labor and capital input during ships’ stay at the port,
for example, input for loading and unloading.
• Labor productivity displays the employee’s overall performance and measures the individual’s value added in the
production and sale of the output.
• Capital productivity pertains to the value added per dollar.
• Entrepreneurship, which, together with labor and capital, generates a by-product that is crucial to productivity and growth
• Value added signifies the income generated from the port’s performance, including facilities and services provided.
• Financial indicators pertaining to ships’ traffic and cargo volume at any given time.
• For instance, operating surplus or total revenue and costs associated with the ships’ charge, for example, charge per 20-
foot equivalent unit (TEU) for container ships, or cargo volume, or ships’ gross tonnage (GT)/net tonnage (NT).

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The Econometrics of Labor and Production

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Port Growth, Productivity, and Empowerment

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Reference:
• Port Management and Operations by Burns, Maria G (z-lib.org)

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Tugas Baca:
• Chapter 2: Connecting Hub Port
Gateways to the Inland
Infrastructure
• Burns, Maria G. Port Management
and Operations. CRC Press, 2014.

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